"Then the Regent pimped his palace," says volunteer Brighton greeter Jackie Nowell, waving at a collection of outsize Disney teapots topped by minarets. "It's completely mad, especially at night when lit up in purple and pink lights. In winter, there's an ice rink outside and it looks like the Kremlin."

Amid the straight-laced classicism of Brighton's terraced Georgian houses, the Royal Pavilion is a bad trip: a Gothic-baroque collision of Indian fantasy and unrestrained Chinoiserie. I troop around the interior, lurid in pink and green; a burlesque, oriental stage for 50-course dinners and bodice-popping romps under writhing gilt dragons.

Dour, double-chinned Queen Victoria didn't find the Royal Pavilion's flying reptiles and bordello-like décor amusing, and high society similarly abandoned Brighton's chilly pebble beach for the sands of southern France. In the 20th century Brighton became tawdry and fun-fair cheap, the fine Georgian facades peeled, and people sniffed at its hanky-panky reputation.

When I last saw Brighton 30 years ago, it was a decaying seaside town with a tatty beachfront and joke palace. Things have changed over the decades. Gays moved in, the town got funky, commuters realised London was only an hour away. The renovated Royal Pavilion was repositioned as an outstanding example of the Asian-influenced, dreamy Romantic Movement. "This used to be a place where retirees went to die," says Jackie. "Now Brighton is a young, lively city full of arts and good shopping."

Around the Royal Pavilion, she shows me plenty of Regency architecture: tall, thin houses covered in stucco and bow windows, the sedate facades of a licentious era. But Brighton's edgy youthfulness quickly appears as we head along Kensington Street, nicknamed Graffiti Alley, with its screaming cartoon characters and anti-war themes. "It's the only place the council allows graffiti," says Jackie. "Not that that stops anyone in other places." But Brighton's graffiti is splendid: lolloping Georgian giraffes, a gunslinger shooting butterfly bullets, a pub covered in pop icons with Johnny Cash giving the finger from a chimney. In Frederick Place, a Banksy shows two policemen kissing.

Most of the street art is in North Laine, a district of former locomotive-workers' cottages. After the railway works closed, alternative folk took over and chain stores were banned. "You see here, we have a Moroccan cafe, an oriental bazaar, next door a bicycle shop, isn't it fabulous?" says Jackie, gleeful on a street corner. She shows me alleyways known locally as twittens, sheltered enough for banana trees to sprout in back yards where hippies barbecue their sausages. Well-heeled city commuters have moved in too, and the cottages now command regal prices.

The city's liveliness surprises me. Pub terraces are packed, queues form at gelato shops, and pedestrian drag Kensington Gardens is thronged with shoppers. The first Body Shop was once located here ("A funeral director down the street complained about the name, but the council decided otherwise") and now you can buy healing crystals, native-American handicrafts and alternative fashions. Jackie's favourite shop is Snoopers Paradise, where she rummages through vintage clothes, old cameras, deerstalker hats and books.

Across the centre of town we wander down Bond Street, where a bespoke gentleman's tailor uses outrageously coloured fabrics, and a shoe designer features stilettos with teapots for heels. We plunge into The Lanes, where former fishermen's cottages huddle along medieval alleys now crammed with jewellery stores and chocolate shops, before emerging at The Pump House, which once pumped restorative seawater into Brighton's baths for dyspeptic Georgians. Around the corner, the YMCA inhabits the home of Maria Fitzherbert, long-time mistress of the Prince Regent. The Georgians would surely be pleased at Brighton's raffish new liveliness and rollicking pleasures, upgraded for the twenty-first century.

TRIP NOTES

MORE INFORMATION

visitbritain.com and visitbrighton.com

GETTING THERE

Cathay Pacific flies from Sydney and Melbourne (9hr) to Hong Kong with onward daily connections to London (13.5hr). Phone 131 747, see cathaypacific.com.au

STAYING THERE

Hotel Una has 19 individually styled rooms in an updated terrace house in Regency Square near the seafront. Rooms from $220. Phone +44 1273 820464, see hotel-una.co.uk

EATING THERE

Seafood restaurant and oyster bar English's of Brighton has three-course set menus for $45 and a la carte choices featuring contemporary British food. Phone +44 1273 327980, see englishs.co.uk

The writer travelled as a guest of Visit Britain.